Crude oil prices have soared past the $40 a barrel mark--the highest they've been in 14 years

By Novella Carpenter

THERE WE were at night, driving around to find the cheapest gas ($2.15). I had to fill up the van that I sometimes drive for work. I got out, ran the gauntlet of spare changers (I live in a rough 'hood) and delivered my $10 bill to the lady behind a 2-foot-thick wall of Plexiglas. About two minutes later, I tapped on the gas gauge, which had barely moved. Then I realized that I'm becoming my grandmother, who always stuck a $1 bill in our birthday cards, even when we were in high school. Ten bucks ain't what it used to be.

More than a year ago, I wrote a column about what to do when gas prices soar. I suggested making sure the air pressure in your tires was correct--if it's too low, you can lose 2 miles per gallon in efficiency. I suggested locating the cheapest stations by using GasBuddy.com, a website devoted to finding cheap stations in your area. I suggested not driving so much, for God's sake, or at least combining trips. But now, now, things seem totally screwed.

Crude oil prices have soared past $40 a barrel--the highest they've been in 14 years. In mid-May, the Senate met to discuss why oil prices were so high. Three factors figured prominently. One is massive growth, especially in places like China. Remember when industrialists fantasized about the buying power of a country of 1 billion people? Well, there's a boom going on in China, and they are using cars more than ever, and these cars need gas! Because of China and other booming economies, the International Energy Agency forecasts that the world will consume 2 million more barrels a day this year than in 2003, for a total of 80.6 million barrels a day. A day!

Another biggie is the fact that all the oil companies have been consolidated, and so competition has lessened. Add increased demand, and you've got (dare I say it?) a monopoly where the oil companies can raise prices without fear of competition.

Finally, there just isn't any more surplus crude oil. According to The New York Times, most oil-producing countries are already producing all that they can. Saudi Arabia has agreed to boost its production, but its oil is too high in sulfur content for the chief consuming nations. Though the oil company representatives tried to convince Congress they've suffered because of environmental regulations, they weren't able to present solid evidence of this or explain why they've made huge profits this quarter.

Still, paying $2 or even $3 per gallon isn't going to alter people's driving habits. Most folks will just shake their heads and submit. On the way home, Bill and I began playing a fun game, along the lines of "What would you rather eat: a hamburger that fell on a dirty carpet or a hot-dog with dog slobber on it?" This game is called "How much will you pay?" What price per gallon would actually alter people's behavior--force them to carpool, buy a fuel-efficient car or stop driving altogether? Bill thought $5 per gallon. If most tanks hold about 15 gallons of gas, at five bucks per, you'd spend $75 per week (assuming a tank a week) on gas. Sad to say, but I think most Americans would be willing to pay even that. We are a money-loving nation, and we often calculate time based on an hourly wage. If it takes someone an extra hour to take public transportation, that's five hours a week, and most people would say their time is worth more than $20 an hour.

To be honest, I welcome this coming shortage. We will have to come up with ways to conserve resources. I would recommend implementing major lifestyle changes. If you can, move into the urban areas. Live close to work, the grocery store and your entertainment meccas. If you can't do that, move closer to a bus line or start a carpool.

Abundance in the oil universe has dried up; it's time to treat it like the precious commodity that it is.

What would you rather eat: Fried monkey brains or baked horse intestines? Email Novella at [email protected]